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Successor Readies to Take the Lead

Thirty years ago, Krista McMasters applied for a job at
Clifton Gunderson’s office in Danville, Ill. She was fresh out
of the University of Illinois undergraduate accounting
program. Despite good grades, she heard nothing back.
McMasters had job offers from other firms, but she persisted
with Clifton Gunderson until a partner named Carl George hired
her.

George supervised McMasters’ first audit and
handled her first job review. Before long, George was promoted
to a firmwide position in another office and, ultimately,
became CEO of Clifton Gunderson. McMasters likewise rose
through the ranks. She was named director of assurance
services in 1989 and, in 2005, chief practice officer.

Soon the protégé will become the successor. George will
step down in June 2009 after 16 years as CEO of Clifton
Gunderson to prepare for his 2012 retirement. McMasters will
become the first woman to serve as CEO of one of the country’s
25 largest CPA firms.

McMasters spoke recently with
the JofA about her career path and challenges facing
her firm and the profession. What follow are excerpts from
that conversation.

Editor's Note

“Corner Office
Conversations” is an occasional series of personal talks
with high-level leaders in accounting and
finance.

JofA: What are your priorities for this time leading up
to becoming CEO? How are you preparing for the new role?

McMasters: Right now my immediate
priority—I’m getting out to the offices and talking about the
transition period and making employees comfortable with the
change that’s going on in the firm, talking a little bit about
where we are at in our strategic plan and what we’re going to
do with our next strategic plan. So I’m doing as much as I can
to be on the ground floor and really start communicating.

Also, I have to transition my role to others in the firm,
so we’re approaching that with a clean sheet of paper and
doing some research on what other firms are doing from a
firmwide structure standpoint so that we can make some
decisions on how we’re going to restructure the position once
I take over as CEO.

But my most important
responsibility in the months ahead is to start and lead the
next strategic planning process for the firm for the five-year
period that ends in 2014.

JofA: How will your tenure differ from that of your
predecessor, Carl George?

McMasters: Our vision is going to
stay the same. Our mission is “Growth of our People and Growth
of our Clients. All else follows.” That mission stays the
same. I’m going to build on that mission as it relates,
especially, to our people initiative because our people issues
are not going to go away. It’s going to be even harder to make
decisions and make sure you have the right people in the right
roles. So that’s going to be a high priority. We’re going to
further enhance our people initiatives in our next strategic
plan—no question about it.

I also think a challenge
for us that’s going to be a challenge from a strategic
standpoint is just succession in general. We’re no different
than any public accounting firm at our level or any level.
We’re all going through succession issues. A lot of people in
leadership positions at Clifton Gunderson are aging, and we
need to make sure that we have the right people in place and
make sure our leadership programs are strong. That’s going to
be a high priority under my watch.

JofA: You have said that it wasn’t a silver bullet,
rather it was 50 different things that made the Priority
One human resources plan you developed effective in
cutting the firm’s turnover rate from 30% to 15%. Talk
about the top two or three components that made the
biggest difference.

McMasters: I can break it down by
area. We started, for example, in the recruiting area. We
redesigned all of our hiring functions. We gave people
training on what it really meant to hire the right people. We
put in something that we call SMART objectives where we
defined our positions a lot better. Prior to that we had
informal job descriptions, and we actually refined those job
descriptions and made sure that, when we were interviewing, we
were really getting at people’s strengths to match their
strengths with the requirements of the position, as defined in
the SMART objectives.

In the retention area, it was
our mentor program—what we call our career adviser program—and
really putting accountability behind that program, making sure
that we were matching people in the right service area
together and that everybody was engaged in the program and
making a commitment to it.

Those are probably some of
the most important initiatives in the recruiting and retention
areas. The other thing I would say is we have something that I
think is really important called Project Life. Project Life is
about helping our employees not only with their career but
helping them maximize their life. That might be flexible work
arrangements or other development opportunities that help
develop them professionally and personally. It’s customized to
their individual needs.

JofA: When you are considering new hires, what makes a
candidate stand out?

McMasters: Passion. It doesn’t
matter so much what they’ve been involved in, but that they’ve
been really involved in it and active and they’re passionate
about it. They really like working with people. They’re able
to communicate, even at their level, at their stage in their
career.

JofA: What was your worst professional misstep, and what
did you learn from it? How did you rebound from it?

McMasters: A lot of the missteps
I’ve had with individual situations within my career I would
attribute to not listening to the degree that I needed to
listen, to not gathering enough information to make a decision
and really listening to input before a decision was made.

I’ve never had any difficulties making decisions. I’ve
learned that you need to gather information to make sure that
you understand everybody’s needs and then make the decision.

JofA: What are the goals of the women’s initiative
Clifton Gunderson recently launched?

McMasters: We made a decision
that we were going to launch a formal women’s initiative and
make it comprehensive. The overall goal of the initiative is
to get more women at leadership positions in our firm. That’s
really what the program is all about. We held our first
steering committee meeting. We’ve got representatives from all
over the firm, both men and women, to help us design
specifically all the different initiatives that we need to do
to make sure that we reach that goal— to get more women in
leadership positions at Clifton Gunderson.

The first
goal is we’re going to conduct a comprehensive survey. We
don’t want to start launching a lot of initiatives that are
not really going to help us reach our goal. So we’re going to
do a very comprehensive survey and prioritize what we hear
from that survey. Then we’re going to pilot the program in a
few offices and really get women engaged and build a firmwide
program based on what we learn.

But the first step is
this survey and also a business case communication initiative
to get everybody engaged in this—women and men. Anything we
ultimately do will benefit both genders.

JofA: How has being a woman affected your career path?

McMasters: I have to tell you I
think it’s been neutral in terms of my career. I never thought
of myself, even from the beginning, as any different than any
of my male peers who I started out with. I was fortunate to
represent our firm on some national committees and had a lot
of experiences that contributed to my development that put me
in this position to be qualified to accept these
responsibilities.

McMasters: I think that the
biggest barrier has been flexibility, and it’s been difficult
for firms until the last five to 10 years to realize that they
had to provide more flexible work arrangements for females in
order to get them to advance in leadership roles in their
firms.

And the business case for those arrangements is
there and is even stronger today. Clifton Gunderson is hiring
about 54% females today. So we have to find a way to make sure
that we’re flexible and we don’t look at it like it’s a
barrier that a woman’s career is on hold during a period of
time. Their career needs to advance at the same rate, even if
they need to work on a part-time arrangement for a period of
years. I think firms are opening up to that initiative a lot
more today than they were 30 years ago.

JofA: Setting aside people issues, what other big
challenges are firms—specifically firms in your
competitive group—facing?

McMasters: One of the biggest
issues is regulatory change and international convergence.
Clifton Gunderson wants to be ahead of the game. We want to be
a leader consulting with our clients and helping them through
all of the changes. It’s going to be a major strategic
initiative to strengthen our international capabilities in
general but also to really be a leader in the convergence to
IFRS.

We work primarily with privately held companies.
There’s no question there are a lot of advantages with IFRS
from a consistency standpoint across the world. It’s just a
challenge to get people to see the advantage right now.

GAAP is a very rules-based accounting system that answers a
lot of questions for people. When you go to something like
IFRS, it’s much more judgment-based. There’ll be less
guidance, potentially, out there. People are going to have to
make more decisions on their own.

Krista McMasters

Professional activities: Member of FASAC and the AICPA Governing Council

Education: Bachelor’s of science in accounting, University of
Illinois

Favorite book: No Ordinary Time: Franklin and Eleanor Roosevelt:
The Home Front in World War II , by Doris Kearns
Goodwin

Favorite director: Cameron Crowe

Online-Only Interview Questions

JofA: Talk about the firm’s involvement in peer
review.

McMasters: Peer review is
really important to our firm. We are the peer reviewers of
several of our peer firms. We do it because we believe,
first of all, it’s the responsibility of the profession.
People need to be engaged in peer review if we’re really
going to have the robust peer review program.

We
also feel it’s an advantage for our partners and senior
managers to get to go into other firms, take a look at
what they’re doing and potentially bring best practices
back to our firm. It also helps them keep up to speed on
technical developments that are going on throughout the
profession. It really lets us take a look at how other
firms are actively implementing new standards. It’s a
tremendous opportunity on a lot of different fronts, so we
really encourage people to participate. And, actually, we
don’t have any problem getting people to participate. It’s
a culture of our firm.

JofA: What advice or guidance would you give young
women on being successful in the business world?

McMasters: I think you have
to have a passion for whatever it is that you want to do.
Attach yourself to mentors that can help you identify your
strengths so that you can really play on those strengths.

No matter what you do, I think that you have to
really believe in it and engage in it and bask in it and
be willing to commit to your own self-development and
lifelong learning. So you have to make sure that you
really enjoy it more than anything else.

JofA: Who had the biggest influence on you growing up?

McMasters: Probably my
parents in general, but certainly from a female
perspective, my mother. I was surrounded by a lot of very
independent females—my mother, my grandparents. Both my
grandmothers worked. Actually, they were both bookkeepers.
And I think my mom raised us all to be very independent
thinkers, to really do the best job you can do at anything
that you try. No matter what it was—how little or how big
it was.

JofA: How do you cope with stress?

McMasters: The way that I
relieve stress is I’m really into exercise and I’m very
health conscious. So I exercise every morning and stay
committed to it. If I didn’t do that I think I would have
definitely increased my stress levels. So it’s a really
important part of my life.

I run. I’m into cardio.
I do a lot of weight training. I have a mini gym in my
house. I’m one of those very early risers—I get up at
4:15—and I also watch movies, so it’s a way for me to
catch up on all my movie-watching and also television
shows. I’m not home a lot at night. I don’t have an
opportunity to catch up on all that stuff at night so I do
it in the morning while I’m working out.

JofA: You’ve said that you realized early on that
joining Clifton Gunderson was the right choice for
your career. What got you engaged in those early
days?

McMasters: I felt like I’ve
known from the beginning that this was the career for me.
The profession was different 30 years ago. You led
assignments right from the beginning. So the firm got me
engaged in some great client activities in the first few
weeks that I started. And I enjoyed it. I expanded on it.

I’m someone who questions the way that we’re doing
things, and Clifton Gunderson is a firm that really wants
people to invest in the firm that way. They are willing to
listen. I believe we’re like that today. If somebody is
passionate about something and wants to help provide
solutions to benefit the firm, then we say, “Help us
design a solution. Write a strategic plan.” So there are a
lot of different things I did along the way that I think
led to where I am today.